BKI - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the Black Knight Third Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference is being recorded. It is now my pleasure to introduce your host Steve Eagerton, Investor Relations with Black Knight. you. Thank

begin. may You

Steve Eagerton

everyone, Knight’s you conference third morning for call. joining the Black quarter and Good for thank us Thanks. XXXX earnings

Chief Joining Anthony Chief are Financial and me Larsen. Officer, Executive Kirk today Jabbour; Officer,

are were expected slide have conference future our supplemental call results results release website. statements include and to presentation released the of been and Our press therefore morning, related and will our posted forward-looking statements. This this to company the

to differ forward-looking other Our earnings of from to materially a actual also due risks that number XX-K, SEC and projections uncertainties are may will measures. remarks statements include The uncertainties. and results Today’s release, Form our risks to our references financial subject filings. described and in are non-GAAP

non-GAAP GAAP I’ll at conference This webcast replay to reconciliation Anthony. to the through information Investor in provided Black including for financial website over is will release information, and investor.blackknightinc.com. slide the press Knight’s via now call be turn available Additional between the supplemental information call presentation. financial Relations

Anthony Jabbour

to growth Steve. new thank to Black us quarter against our you third platforms, our was for call. delivering you, we Good strategic adding solutions, and This for which continue strong during strategic innovative our earnings acquisitions. quarter cross-selling, morning Knight, initiatives, a for making including joining Thank execute everyone, core clients and

want urgency so the that year of that our the do, integration despite value benefits solutions in of strong this one the our challenges unprecedented far seeing been reap they lenders thinking valuable we Knight forward illustrates offer. of that particularly and environment. innovations, all and and this Our This sales servicers sense to have our Black the from are

Year-to-date, each we call, non-bank on representing three a provide MSP new with servicers. me XX our we've Top Caliber, two clients software quarter, clients business. servicer, First, loans. an beginning and on mentioned over the which In new signed last to signed let including third five XXX,XXX the MSP businesses update mid-tier our servicing of I

XX loan the last Mortgage, that At we've continued Dovenmuehle the end sells We software of also used these contract team value can the Top renewed In solutions with double. our Services,] origination and we've the our contract are AIP with reorganized a been Expedite, be servicer. momentum results [AIVA, selling exchange, remarkable, which that MSP we solutions year, system. origination and more any seen sales than as have business,

success selling top We mid Empower lenders. tier continued also had and to

quarter. signed lenders our two fact, the In new to third we platform Empower in

Black signing [BB&T that addition includes term the we to truest renewal production] In which to previously adding long onto Knight discussed. systems,

we as twice value to platform last the Next, the quarter and clients the business analytics and many the year, have and or product our Last analytics see year, since I'd like than speaks RAP RAP. data develop to talk third make launching clients informed launched business. to solution in we informed We to about our decisions rapid in the which strategies. help effective them signed

it we leveraging when platform, enabled launch urgency. banks investment RAP. service deeper a The commitment us generation MSP executed the frequently which Federal caller’s our these Bank. solution, focus and that insights It we this our differentiator innovation, and the the daily colleagues, on that quarter with helps of intense customer and into our of has Reserve on of share to pandemic, you clients, In and In renewals. top onset with I our the integration, our is RAP all solution addition next McDash the the since data, and included data Flash, be the displaying respond this tries four month. the third bundle signed can is to performance. both include coronavirus unique impacts support the single to deals solutions to servicing so respond alone, clients dataset comes by McDash eight companies quickly, launching that location, will better being their last sales powerful We've more a clients give Flash and a clients four customer to to At efficiently, they to accurately. questions it customers in information they launched need

We continue our to also capabilities to suite. add digital origination

need available their any enables is point customers, solution, with digital this application which they consumers process, for loan and officers, Complementing delivered also them have throughout mobile to serve the sale process we on which by solution, loan loan Our all complete platform of anywhere. a the schedule generally their now from simplifies AI anytime, leveraging solution device. digital single responsive to tools gives the the application a

software enhancements about some e-notarization solution, and select to into jurisdiction. Next, to Expedite third this In remote talk to advanced uses most to I'm integrated leading permissible a which best, support made Close Close acquired DocVerify, way close the we've to and we our Expedite online the going loan each notarization. digitally for quarter, intelligence

in through package. more document-by-document close closing closing solutions the into on and contactless efficient mortgage process. journey these lifecycle guides basis the is a Together, innovation our guided Another borrowers a that new digital transforming solution are

further the integrated As our to are particularly they digital just footprint. serve where the our solutions further customers digital trend All and accelerates, I mortgage are. mentioned, towards These fully in client’s the a distance solutions their socially enhance environment. process ability

only to which platforms are process in their leveraged to satisfaction point as and efficient We be digital provider that any solutions our customer the industry as across help that well better the clients more retention. long the leads increased the serve at can customers, cycle, in comprehensive be life and offers

and gaining our continue digital mitigation with solutions. loss innovative traction servicing we Finally,

and the on XX% for In MSP loans XX% now for fact, signed we digital, servicing have mitigation. loss of

assets momentum the on Optimal premier as By mortgage well combining we a Next, drive help in I'd have strong that pricing will and an to valuable now in for to has product can eligibility continued even of engine, more the data teams revenue capability our set clear acquisition and power team and our and to to of is how delivering of pursuing technology companies. Analytics the with about our this remain your we clients The hedging which and additional we and Compass today. the transform combined and time industry. innovative our Thank to core like closing, In have to update deliver identify in we’ll give drive innovations started to We've The forward closed existing execute already our it's industry. September. Optimal insights future clients, Blue, that clients. aggregate great continue of you company. both and leading with as experience growth fundamentals Blue deal analytics relationships acquisition strategic you on our resonating combined offerings, we the ways providing this calls. with built strong, by continue look solutions new of updates solutions both I'm on the of strategy business I excited the expanding to clients, adding for acquisitions. on

turn the for to like update. to over financial I'd a Kurt call Now

Kirk Larsen

that the you Anthony through origination I'll the our Today the of and you, was volumes to in quarter of with The I'm and that business. details outlook. and results came predictability another With that visibility, everyone. for summarize, came the and It good year. in performance resilience, our take we underlying results expected the Thank going morning third discuss quarter our as demonstrated the in To very was outlook higher. strong. exception said our third updated quarter

quarter. their basis, Turning earnings Black Diluted the earnings of XXX%. X.X% effect per in to $XX $XXX to of diluted million increase an attributable which compared non-cash or to placement. primarily Slide gain revenues GAAPP our million, to an to Net compared GAAP as margin concurrent was $XX an result The of an investment Net private & was of our On per Knight a attributed public of results. year were was XX.X%. prior an initial X, in shows a Dun and share, earnings Black third Bradstreet $XXX were offering to share XX.X%, million related $X.XX, Knight increase increase net earnings quarter XXX%. of $X.XX increase million,

results the our now discuss third I’ll X, quarter. Slide to adjusted Turning for

quarter Third XX.X%. at margin of was million, net an $X.XX, Adjusted to of an an X%. $XX and EBITDA Adjusted of $XXX increase X.X% $XXX year increase quarter. increase increase to Adjusted X%. were million, an adjusted XX.X%, adjusted share earnings compared of X% EBITDA prior were was earnings revenues was compared million, per

Turning now segment to Software Solutions our X, I’ll Slide discuss results.

Third to quarter revenues X% $XXX segment for increased million. the Solution Software

the Our discussed moratorium. foreclosure the XXXX. of headwinds, a servicing performance anniversary of the certain anomalous of improved year-over-year of the and conversion a previously quarter from of software The result as solutions the as revenue declined from the America second including effects the previously result Bank headwinds of X% discussed

the and and from continue servicing the XX% new underlying solutions, third We as driven origination In be outlook look growth million increased in our revenue Optimal business with forward. we $X.X performance software high clients, software for in contributed quarter. of origination revenue the volumes Blue revenues by pleased acquisitions. to

decreased to revenue XX.X% unfavorable mix. quarter margin to Third due X% XX.X%, compared million and $XXX EBITDA EBIDTA was to

quarter revenue EBITDA Analytics the Slide volumes, an prior compared execution, from higher third quarter. million business. was million. the segment based for the basis increased of corporate acquired to increased EBITDA X, EBITDA sales the by was Turning increase $XX XXX to from XX.X%, Adjusted and margin by $X primarily for an XX% points million, year origination quarter unfavorable compensation. to revenues high segment $XX XX% and Data to driven incentive strong year driven prior

the Slide X.X Turning million, revolver Total of was and leverage debt capacity cash we through had $XX We was I'll ratio equivalents At X, billion]. end had our of [$X.XXX walk structure. million. cash September, and debt our principal now to of times. available $XXX

Dun through our walk & shares. through XXXX, outlook I investment in go the details our Before I’ll of Bradstreet for updated

Slide XX.X D&B was million of shares. billion September prices of to investment $X.XXX XX. on now the The $XX.XX market Turning value this we on closing X, based own

and $XXX was saying performance goes puts we gain investment. Our D&B the unrealized billion. have pre-tax after-tax the million; It at gain with our at at and our million. team million, been unrealized value invested investment $X.XXX capital our D&B our $XXX without of very that of $XXX after-tax That pleased

expectations Adjusted expected discuss Slide for Revenues reflect raising outlook to billion. the outperformance expected $X.XXX in be and to Optimal $X.XXX our quarter EBITDA adjusted quarter. of are of the range updated fourth the revenues and million $XXX XXXX are is to which the to the X, per billion share the be to for the full-year of Blue to $X.XX in to for adjusted range earnings be to in $XXX Turning the I'll in third we $X.XX. acquisition, and expected million is range

details as Additional our underlying follows. outlook are modeling

in and depreciation including and the morning. incremental again XXX fourth of certain adjusted $XX net your XX% fourth for to tax from weighted excluding XX% full-year discrete and shares quarter million. effective interest million; expect weighted average average shares accounting; I'll rate We the for of amortization full-year and of amortization full-year expense operator expense the time benefits; and this Thanks full-year, quarter, outstanding depreciation and approximately million of $XXX resulting for XXX.X turn the now million, it over tax of approximately purchase Q&A. approximately outstanding

Operator

[Operator with first John your Our Stephens question. Campbell proceed from is Please question Instructions] Incorporated. with

John Campbell

guys, Hey on and great on efforts Optimal Congrats. innovation the congrats then with work. quarter. Blue, that’s success Really closing good

Anthony Jabbour

Thank you, John.

Kirk Larsen

John. you, Thank

Anthony Jabbour

Thanks so much.

John Campbell

of now? First once – expected through if update on implementations? get you many MSP kind the count can many then, just loans what's And loans question, how us, you the are how loan

Anthony Jabbour

total. are first XX.X million, million], [XX today seconds, X.X which our loans Our on is

second, share second. a about is XX% market then, be first and XX% on on pro XX% XX% on So over first, forma on little and to

John Campbell

something that's think give And It you I as million, looks little that. that Okay, schedule be you now, like Optimal like on framed guys mix then, growing on XXX Blue, this if the if more I contractual Optimal a Blue of provide kind color think guys point? maybe of might an originally maybe little of outlook us bit at transactional us on could so XX%, up helpful. kind versus a and update ahead just XX-ish, can you you

Kirk Larsen

but From the very for Yes, that the in, to very it’s not expected in versus are XX% content, fourth forecast the for the little of subscription, as came as in in transactional it's providers most benefit that in John. It about was we the sensitive business volumes, bit expectations subscription, in area. bit it's But that of a with a frankly, third is Knight had with right similar origination [two-weeks] that a and is other subscription quarter little as million line still Black software some high less. the space. nearly from area, we that a quarter XXX

return, business, very consistency So, then, and high that which predictability that quarter base, the in the course, of high the we we like is last is, as revenue and something really margins. talked about incremental about

John Campbell

you and on then, you safe into assume a origination the it have And Analytics that you falls bit Okay. to for majority I but revenue, vast know the little modeling, know, is of of Data guys? that

Kirk Larsen

It all does.

into technologies of Optimal So Compass, actually, combination division. reports Optimal a fully marketing combination We our business. origination and Blue of secondary Compass created Blue. a the with That's software

John Campbell

Perfect. Thank you, guys.

Operator

is Andrew next Securities. with with Our with question your Please Jeffrey Truist question. proceed

Andrew Jeffrey

good morning. you Hey, call. taking I the appreciate

Anthony Jabbour

Good morning.

Andrew Jeffrey

the terrific solutions new Is little you You the What’s we talk that to driver. grow might bit maybe about Blue of about timeframe that know there? how strong fit, of seems Optimal know, they entity? a a Anthony, consolidated out perhaps Blue and and very the obviously a event? you future integration roadmap? think Optimal kind in a XXXX a exactly, roadmap And growth you the be, know, of solutions can product

Anthony Jabbour

the is Blue Sure. Empower with Andrew, integration, Optimal and Well, integrating targeted QX. first for that's

You And know, QX. projects, forth, back And the on coming more on in created where but broad we marketing and selling, of, Kirk lot to specialization [secondary] know, new – in that that a and with technology we and new with. great as cetera, it's a to often division, really running our sharing terms integration, of collaboration you constantly the et ways – innovate there's possibilities business of up you we'll been it, looking from know, new our terms basis, Compass said, Analytics leads come find in Optimal ideas division, where Blue, put together a we’ll space.

know, those to that clients, right is beta some basis. data we’ll platform, You loans, learn, a know, pursuing the and, we the know, the and is GA that on loans you previously, at on I what at probably the know, and Optimal imagine a do steam have now what and our most year, then, know, soonest you season next you and MSP had, trading do, one with that from probably adding but you has launch the one, always point test, come work Blue we we're pivot, it analytics looking

Andrew Jeffrey

and extent purchase Okay, it's And thank rates just I on stay that wonder if comment is you. you to market helpful, I – then, could just macro-environment low the the the robust.

perhaps of possible worlds is to kind all the next start into best As see activity, we for of some increased Knight? year looking foreclosure this Black

Anthony Jabbour

certainly way humanity it's announcement see of but to Pfizer low. related we as saw pandemic, Well, all hopefully know, low. ourselves work rates But in are and can like this by, morning, is the foreclosure stay much did [indiscernible], affected as to things things moratorium, which and natural I occur, other looking and good for in improving, terms said, They're impacts environment. such of know, you as pride seen, the on not the our the you thing this occur you've that we as being we certainly, out

about, has credits tax know, low on for you you spur more think, know, income. President-elect to purchase talked I

them. continuing So, starting we year, these – we'll through we next – you we're see. we're in foreclosure but, to about spot. I know, a moratorium you There's know, headwinds tailwind, good think mean, anticipate all go that that across and the things, I we think can that certainly does

turn the and such where, be an been as know, It’s you within ourselves, to there for leaders headwind would guidelines. to for – that's clients know, regulations, a You a industry. you know, strong increase example, potential tailwind as to in industry classically something stay companies

feel work feel good about good about we positioned. we'll year. certainly we're where So, next We but, that, through

Andrew Jeffrey

much. very you Thank Great.

Anthony Jabbour

Thank Andrew. you,

Kirk Larsen

Andrew. you, Thank

Operator

is your Sabadra question proceed next with question. with Bank. with Deutsche Please Our Ashish

Ashish Sabadra

my taking for Thanks question.

you've the I think on suite, client the but suite conversations? up how the the origination first wondering do for about few going suite? had you've very your great great Obviously, building really are last So of Thanks. success know, quarters, a a there one over momentum the is built origination was Blue. pipeline the but it's forward? days, plus the early you out product I How how still digital combination just with Optimal

Anthony Jabbour

I, the that the trends just know, Sure, the that's going on feel and forward. the you Ashish. leaders certainly know, prior accelerated them. pandemic, great to exaggerated know, we're you We about momentum you digital channels, feel – and the and,

And and the our so, innovations clients we're to really that market with them and conversations bringing that having with is we're our seeing resonating we're the that prospects. in

how we there. good is very we’re feel about positioned answer short So

Ashish Sabadra

think great. well quickly products, then, follow-up that can pretty color well, called what's eight as Data And strong driving are That's And a Any RAP just acquisition? you Can about out – there new there, and just in the just well? what growth about in organic as pipeline us market as excluding and are Analytics, you then, other momentum those give share wondering, was, business? but do Thanks. which you And if mortgage there strong talk on that momentum? how any deals. the obviously fronts? on You there are the there as platform, McDash, Kirk,

Kirk Larsen

Sure.

So, the effective question, analytics was answer the aspect, X% back collateral growth. volumes, to and first out quantitative you it about if

we're continuing Analysis margin So, well with our very performance that Data as in consistent very we're the performance, to actually pleased as be business. and – and

quarters, So actually it's performance so very From pretty a very driving consistent with several based. the broad last good what's it, there.

leveraging are cross-selling existing to we the relationships. to on know, those focus You base and continuing client

the analytics not only deliver to only sale, the platform data. it's way receptivity sale a which platform, it's not leveraging a but more to of We’re way rapid – the and a is

it's it's or but five that think board and well, And well. a over so, the across that's that what those and it's reasonable to been we has quarters, remarkably as consistent expectation we deepen as way four performance go forward been really actually partnerships last as a the

Ashish Sabadra

Thanks, such you. results. and congrats on Thank a solid

Anthony Jabbour

Thanks, Ashish.

Kirk Larsen

Thanks, Ashish.

Operator

proceed with is Huang question next Tien-Tsin your Our JP Morgan. Please question. with with

Tien-Tsin Huang

call but [boarded] very Everything's a timers I morning. like to ahead except for just America know, mix, Any bit or overcame line trying was considerations our line think know, specifically, servicing margins revenues the Bank it good you that like that everything etcetera. strong. Really overall of there little there, in you [ahead]? of Hi, to came It looks expectations. you've one got, about the for and out with

Anthony Jabbour

saying software Tien-Tsin, margins? solutions you're

Tien-Tsin Huang

Yes.

Kirk Larsen

it's one revenue mix, new it didn't Really, termination had acquired from a no question. good anomalous the that fee It require related of We were a so come course, like those little origination the replaced timers variable lower of from In a costs. of clients, recur. of those year. and We XXX% quarter, at of then, It's a a level a something comes didn't normal benefit medical That have had limited down to an relatively happened And quarter. perspective. headwinds does really that third and with then, we – last we some there's basis. with Yes. to on some businesses. expense costs very year-over-year put, margins more margin. simply on that basis transactional got with last back support even that Those the was

So, it story to else revenue There's than nothing know. really anything. mix more really is a

Tien-Tsin Huang

some some And [indiscernible]? there? underlying the is there break here, No, to thanks you. is up for the Got just in change Is us predominantly Blue performance with any way for benefit then, acquisitions? coming Or guidance the maybe in Optimal it that. that on

Kirk Larsen

sure. Sure,

own our in we volumes. expectations because QX of So exceeded

potentially When – guidance can you that came the And an to frankly, be at next this. we reason the into and above guidance Optimal new QX are. the where amount Blue, year, first we it's conservative. layer, is, we second was the there And it, be and into so, it incremental environment you I what layer. there's Blue that's, The in then, that, numbers a our half bit look – if the anything you of think any our if didn't other gave you back think range take Optimal know than excluding those like the for becomes

our in prudent be environment, with to now. left And – this six so, even business the conservative there's is, predictable felt as months we little a with as

three We half – there's – there's the have months remaining. know, left, only time – you it's there's

back you forward. of we so, that things know, think the and get up we tuned the guidance, at I And raised thinking to sort going now range, the of narrowed mid-point

volume, it first It – a is really was conservatism Optimal third, the and was Blue, So it that. bit just in guidance. prior it was then but of second

Tien-Tsin Huang

you, Thank Yes. Always happy to see guys. the [raise].

Anthony Jabbour

Thanks, Tien-Tsin.

Operator

proceed Our next is Ryan question. Please your Tomasello KBW. from question with with

Ryan Tomasello

Good Thanks on for questions the congrats taking to] morning, quarter. strong [echo a and everyone.

Anthony Jabbour

Ryan. Thanks,

Ryan Tomasello

an the that the of comments Just question, is earlier at clients the seems Blue hanging following up your like is lower to Empower completed. once it cross-sell on fruit to existing opportunities one Optimal integration

like? what level opportunity that from you I So of can what expect will adoption, might could Empower the revenues those Anthony, know, know, ongoing, clients? you talk the about you clients cycle sales mentioned of you look and there terms from its in be

Anthony Jabbour

how more in constant a Empower know, we're obviously, say The inside about innovations lot coming you terms Blue got that out. Optimal basically we've all you PP I built-in you powerful. of, in a engine majority sales see the our clients Empower. a And of know, progressing with clients I’d is, know, is communication had the process,

capability, new deals, we as with in, know, sell, we will you we're And you Blue just Optimal bring that bundled integrated. sell already to automatic those and clients. to new So, and Empower them excited know,

in how want terms we loan of what to change is system. we do selling So, market go origination want we to just a to

in a we decision. way, clients. it our it for easier it. do engine It's market, integrated sales to making not has to capability it into integrated course, more more cycle, bring separate More Of more we're more a integrated want a and PP and and into that bringing a

really a that's focus what is, from our So perspective. revenue

Kirk Larsen

that loan then, having the as course, deals, for deals, each of get as we'll benefit up into of contracts don’t into in on said, – get a add basis, bundling it's [indiscernible] clients. but it we'll loan usually the it from But pricing We about something Anthony it's particular and get well. certainly Yes. for – the and something existing per the of several end deals, – be that that help we've nice per be it's Optimal talked think it'll over the we'll I a contribute for next will certainly, XX% to you years add will revenue And that know, that to Blue. our growth Empower

Ryan Tomasello

know, And clearly of you is Great. in then, terms strong XXXX sales a to up shaping very be and implementations. new year

I XXXX, as and growth So moratoriums other, forbearance without those like Optimal impact you you know it across perspective? ongoing sales, business specifically, the to a the as software us factors bag you D&A, and from moving impact know, wins and quantify we explicitly maybe rate organic possible is being from the run about per guess, that recent cumulative anything next asking for could about year. implementations in for of And a client revenue to the in some well into recent through think pieces as foreclosure the of already next walk naturally layering really year growth is power se Blue accretive in

Kirk Larsen

that Sure. will that clients us go say, today; what working will – I'll tailwinds going Certainly things budgets to through you're kind question. of as thinking platform. very I'll a exactly the but are flip, going revenue that the always next detailed the it is year in of it meaning here a we this terms, coin to is direction those we're – next growth because to where three that's can great all asking walk do that headwinds But buckets, the sit change. of growth, the It's things bit as at is a details, biggest be about. through point, you what drive driver the on year; that our and premature and things new things for know is, take related I some that year it's it's time – about, we we on one, in which Ryan. then, – single go known It's don't

we I certainly where are nice into you a months and and a would go and or going get primary [are are Bank platforms, have this then, live where Empower, we specifically relative I that clients year. other year. this five MSP, year. it to full backlog So – year, will it say will we'll of but foreclosure the characterize next is year live have And America next we'll have versus know, signed] bankruptcy certainly of gone have

driver growth details of for next that through the give be that'll next we'll full year go what when and guidance of expectations the our primary our So are we call. on

The thing to be is a benefiting next attrition. more year to typical other going return

we those abated, year, as So, just year, talked it we a the last year. bit carryover some from through to have will almost next one little anomalous entirely and headwinds about then, of have gotten abate another will later this of

as growing, so you eligible will just refinance to because see sensitive before, number, Optimal said it but, refi large most we a Blue as at Where that a population, know are calling for a that volumes. be we'll others the from that – to can but a our not X-ish perspective, you than From just there's have rate that, as next accretion not accretive move growing think you lands, year's ultimately it, it Anthony kind attrition headwind overall full-year we'll then, So, back of experienced the its organic growth that of the of get rate. thinking percent origination just into have is year. know And and level we it know, and this had as we're in said, past. volumes, bit, to around it but we lower origination be to wait can about you all the that

and it's of points origination, record pickup significant growth. the level a with year this So, of couple

a – a or there is to one for get it's smaller grand tell know, the number. somewhere. our life assumptions on know, big one not something as you we had know, points, think to deferred extended, you this the – the for you example, maybe amortization renewed the relatively year, those client things. then, the kind and year, we fully if our that call. of first details contract MSP to got on But And I'll we tell scheme next you and when in just many know, large and over just you know, platforms, been the times, we because has It's in clients it's this of implementation renewed revenue and of you and now We as detail, paid but go so, implement two recognized. And and that we you our contract. of headwind, a the so, through Empower, that We'll the recognize next end it's,

so, that's or probably to And year. of point so headwind a half next

the the point something because not about but say it’s where thing, I’ll that this of the I’d at point, foreclosure the it So, asked. then, out is bucket don't you the volumes. on we know piece think you know, as last And you biggest third number,

going to next would our are with sit You come we second year. back in half have we of we're be is that another we I the for to expect quantum monitor timing exact and here today, what would that thing know, say, But would something next as expect the year. you when very assumptions give explicit and we I them that it's to guidance

from all we're things costs. we, the lower the next that's So, set giving there all to year. year and on the know but something we'll coming year, some medical back. costs those as things expense and side about just it thing of call. that'll it'd blocks important I we That's to also you, we, variables thinking measure is, experienced know, on be through the we're One year, a next – entertainment be working because details think marketing can about so and like some bit there year, next I normal with many others I'll And that, the those the we that from norm, how building side. know, I to home, be this for go we'll we'll revenue of as but are will well next the but back through the are, and and travel year, look be not as we go elements side on maybe those next benefited related return sales everybody fully mention won't that quick same we assumptions, too I'll because else guidance of when kind against of certainly, about those And next expense talk think you give you

Ryan Tomasello

for questions. Thanks the guys. Thanks, Great. taking

Anthony Jabbour

Ryan. Thanks,

Operator

is [Operator Fargo. Please with your proceed question. with Williams from Wells Instructions] next question Our Jake

Jake Williams

Good morning, everyone.

Anthony Jabbour

Good morning, Jake.

Kirk Larsen

Jake. Good morning,

Jake Williams

wanted strong anything favorable operating margin origination by any, I leverage reductions structural to cost expansion you with much touch on of your that tailwind D&A, versus the driven or more in of was know, ongoing? how

Kirk Larsen

volumes, really a more was the leverage operating that were on it though, very efficiency. volumes. a more that wouldn't basis, was was [indiscernible] there actions been is in origination about That and growing That I natural But because There no so, just we've say and it the on about it X% for is business. it business really benefited. really cost positioning focused –

aspects run. in within so, we've and can we once it bring it investments isn’t some with we business there in But it's which our volumes other sold]. the There cost certain And cases, deliver times, many selling a variable most are cases, them, lot of a and costs. to [tickets do of whole like matter that is way made the

as going continue business forward. focus pleased for the in with we're, over quarter and going to be the with now of maintaining performance in a before, row XX% margins and third that to So, I said very our that's

Jake Williams

much. very you Thank

Operator

Stephen is Our with proceed Blair. with Please William Sheldon your question. next with question

Stephen Sheldon

my morning. Good taking for Thanks question.

want [indiscernible] Just to one ask the here, your servicing quick on one I side, just update.

I lien, the second XX% add I KeyBanc think you on said know recently. you and

going ask share moving to on Just market next few higher years? conversations the and second in wanted are look potential the for as we to continue out the over particular side how lien

Anthony Jabbour

have, out come know, know, well, with of also as second and value great digital you the lots a to up actually with around it holistic then, continue resonate you conversations – lien solutions to resonate continues came proposition we because to that Well, where more you we that. continues so it's – the launched more we even previously works solution that as servicing know,

you in new good to and know, on, forward as we're come. our the So, [indiscernible] look about updates know, having we continued, that feel, you momentum they very wins space you know,

Stephen Sheldon

Thanks.

Operator

with questions. Mihir Bhatia next Please is America. with of from Our question your Bank proceed

Mihir Bhatia

nice there in taking lot and growth it. about questions. my But, some thank and to pieces the ask you Wanted this morning you you Good Analytics for saw business, has of Data a it quarter. know,

have of because that color you forbearance did of tend that risk start I things year analytics or once are bit provide and next resonating case question bit is like little and is there start data get be – one these, resonating you – in that a elevated there me more more it give a be is data dropping little resonate more easily? and of the some pieces providing those might customers are maybe don't there Or people some that was, need pretty like, is of certain to you can So a And the know, sticky that year that? could on up currently? lot in after any they and you there off this and anything generally there

Anthony Jabbour

in probably There's Sure. having you doing success you and a know, in we're things. growth, obviously, all the attribute right few leadership D&A addition know, the I'd to, great things

The first insights so in RAP to our It RAP the view for our to it. platform. speak, introduction look their [sandbox], of gives a data clients and with is new for and – from our opportunity really to an data really

way And a of that so, led has powerful in for to sales lot us. it's and data

would be that So one.

would McDash second be our The flash.

interest quickly you integration we the have data relationship really you all working our And the other our to and you when I'd analytics seeing, with and say to and know, you know, in just beyond the organizations really very know, relationships what data to that's initial, sharing were contributed can agencies types I'd pandemic into to we provide and know, core out, say as lines, we're that So early of the is grown broke sorts of these organizations. third, been, on front platforms. on, forbearance our

you just client we a So analytics, perspective, and again, but we from originations Black know, one about integrated and – data talked and servicing we Knight. really want them see to

help we we as platforms business offerings them that's and more us them and grow into so, core more the to that in And as sell well. continuing our and include really packaging, integrate these

that out. So, areas call those three probably the are

Mihir Bhatia

be just then, is guess you Blue allocation know, that question last has for capital me, Optimal just Is generally I be And in now your talk wider near are to on appetite you you strategy it and close. it. That'll acquired, more tuck-in allocation? here, you. M&A? still Thank your Can Got your what looks of type just capital to likely for about kind acquisition? that, Or smaller of like, all. from seen as open terms term

Anthony Jabbour

perspective. cash at Yes, macro level, Sure. our the allocation unchanged remained priorities have from

continue to Blue. know, we're stay [with we're obviously, as invest, leverage Optimal there, innovation. internal said, investment going very to going But, You what with to the the I We're pleased, know, in consolidated you seeing and our mid-Xs. know, you course. increased acquisition know, to first, the of] We've and you

significant obviously, generation. And reduce on so, continued that focus we our have But happen a potential EBITDA, near growth acquisitions, delevering, our as tuck-in investments. won't have term, as based on and the as our to delevering focus internal cash abilities or on will a quickly well which

Mihir Bhatia

you. Thank Got it.

Anthony Jabbour

you. Thank

Operator

question-and-answer to would Anthony and Jabbour, session. reached to the CEO, turn we for like call the of end And I have the Ladies over closing back remarks. gentlemen,

Anthony Jabbour

closing, confident with and shareholders. Thank and drive delivering their through integrated acting solutions I'm to value long-term value our growth a our to powerful ability success. and urgency and market efforts These for in create continue grow share In support clients will continue to significant you. to our by

have I'd great I for their for Please stay our thank like to day. and to my support. our and a ongoing extraordinary thank colleagues to work to their partnership. clients Finally, and for our trust Last, clients their like shareholders commitment and safe

Operator

conference. today's concludes This

your may You participation. you time. your at for Thank this lines disconnect

Black Knight (BKI) 9 Nov 202020 Q3 Earnings call transcript